Atrios doesn’t have to say a word; he just lets Fox “newsman” John Gibson hang himself with his own words. And don’t miss that “punchline.”

No, it is not a threat to America, at least nowhere close to what you’d think from reading Instapuppy and Bill Gertz. But the real threat could be a political one affecting the countries of East Asia, according to this Asia Hand.

The China threat is a constant refrain when traveling in China or when discussing U.S. engagement with Asia. While we shouldn’t ignore the modernization of China’s military, that shouldn’t be a primary concern. Rather, the real challenge is Beijing’s ambitions in East Asia: The real “China threat” is political.

While declarations of national strategy should always be viewed with suspicion — matching ends and means is difficult and events usually intervene to interrupt grand designs — there is no disguising China’s determination to establish itself as the dominant power in Asia and to supplant the U.S. role in the region.

Beijing has done an excellent job of defining the terms of engagement with other countries in East Asia. During the 1990s, it pursued “smile diplomacy,” forging a new relationship with Southeast Asia by signing a declaration of a Code of Conduct for the South China Sea, acceding to ASEAN’s Treaty of Amity and Cooperation and moving forward with an ASEAN-China Free Trade Agreement. In Northeast Asia, China has put itself at the heart of the diplomatic process to resolve the North Korean nuclear crisis. In doing so, it has focused on South Korean reaction and now appears to take many of its cues from Seoul. Increasingly, South Koreans see themselves more closely aligned with China than the U.S.

Beijing has worked hard to assuage Asian concerns about its long-term intentions. It has settled border disputes, engaged in aggressive diplomatic outreach, put itself at the heart of the regional economy and made substantial efforts to demonstrate that it is a reliable partner. Implicit in Chinese policy is the message that it understands Asian concerns better than Washington, and that it manages Asian issues better than does the U.S.

The challenge for Washington is responding to this situation correctly: U.S. policy must not strengthen China’s hand and a hard line will do just that. Asian nations have no desire to be forced to choose between Washington and Beijing. Many regional governments are skeptical about Chinese intentions, but they also know that China is a geographical fact of life. The U.S. cannot increase tensions without reinforcing the Chinese message that Beijing understands Asia better than the U.S. and that it can manage the region better than Washington.

The U.S. cannot block or stop China’s emergence. Containment isn’t a realistic option. The challenge for the U.S. is to match China and engage Asia as a responsible partner. U.S. Deputy Secretary of State Robert Zoellick acknowledged as much in his recent tour of Southeast Asia. The challenge is to engage China as it rises, to help it deal with the many difficulties it will encounter, to encourage Beijing to be a responsible and productive member of international society, and to invigorate relations with Asia so that there are no doubts about the U.S. commitment to the region. Doing so will neutralize “the China threat,” and build a constructive bilateral relationship that benefits both countries and Asia as a whole

.

I bolded the sentence above because it struck me as somewhat simplistic. It’s a nice idea to “encourage Beijing” to be responsible, but they have to want to be responsible. We just encouraged Beijing to revalue the yuan, and they did, but it was a meaningless gesture because they really didn’t want to, so they basically pulled a little trick. Can we encourage a regime like the CCP’s to be a good international citizen? Doesn’t that require the CCP to possess a fundamental understanding of human rights, business ethics and rule of law first?

It would tell me I’m rich, and I’d love to hear that. From the unlinkable SCMP, a wickedly humorous account of the inanity of CCP statistics.

China GDP data makes no sense without special Beijing
calculator

JAKE VAN DER KAMP
I have a problem with simple things like one plus one equals two when it comes to figures put out by the National Bureau of Statistics. It seems they have an entirely different sort of calculator at work in
Beijing.

Take the latest announcement that economic growth in the second quarter was 9.5 per cent year on year. It was a bit higher than was entirely welcome, but growth is growth and this certainly looks like a good growth number.

Just for starters, however, we were also told that the growth rate of investment in fixed assets was 25.4 per cent year over year, definitely well above the latest cool-down target of 16 per cent.

Our difficulty here is that the fixed asset figure is in nominal terms while the figure for gross domestic product is in real (inflation-adjusted) terms. But it can be resolved. We also have a price index for fixed asset investment and a little spreadsheet work serves to put the numbers on the same basis.

This then allows us to take the fixed asset figures out of the total and calculate how strongly the rest of the mainland’s economy is growing.

Take note that it is no trivial exercise. Fixed asset investment absorbs an astronomical 53 per cent of the mainland’s GDP, a figure rarely to be found elsewhere on this planet.

The first chart shows you the result of the exercise, done on a four-quarter average basis here to smooth out the usual volatility of mainland statistics. That stated growth rate of 9.5 per cent drops to a minute 0.06 per cent, effectively zero. If these fixed asset
figures are right, then the rest of the mainland’s economy is not growing at all.

It gets worse. Another component of GDP is the balance in foreign trade. The second chart shows you that for the 12 months to June, this amounted to a surplus of 657 billion yuan, or 4.5 per cent of GDP. Almost all of it materialised over the past 12 months. In June
last year, the surplus amounted to less than 1 per cent of GDP.

Unfortunately, I cannot calculate an inflation-adjusted figure for the surplus. The numbers simply are not there and thus I cannot give you a third line on that first chart to show what the growth of the rest of the economy would be if you took the trade figures out of GDP as well.

Rest assured, however, that you would get a negative growth figure if it could be done. Even taking the conservative tack, that figure would be at least minus 4 per cent. Aside from fixed asset investment and trade, the mainland’s economy is contracting, not growing.

And then we get even more of a puzzle. We are also told that consumption, another component of GDP, registered strong growth of 13.2 per cent. How is this possible? By the time you have taken out fixed assets, trade and consumption, you have very little of GDP
remaining. If they are all growing by more than 9.5 per cent, what is left to pull the overall figure back down to 9.5 per cent?

Well, let us say the consumption figure refers only to personal consumption expenditure and not to government consumption. No luck again. Government expenditure for the 12 months to June was up 16.2 per cent year on year.

I shall grant you that these government figures are nominal rather than inflation-adjusted and also comprise some fixed asset investment, but, even if appropriate adjustments could be made, there is no way they would yield the big minus figure we now need.

The only thing left is inventory adjustments and I am fully prepared to believe that there was massive destocking over the past six months. We are talking, however, of the very smallest component of GDP, a bare 0.33 per cent of the total last year. No, this also
will not give us what we need.

What we actually need is one of the special calculators they use in Beijing. Without one of these to help us, the economic growth figures just come out as nonsense.

Perhaps they are.

What to believe? 0.06 percent or 9 percent? They wouldn’t be playing games with these numbers, now would they? What a silly idea.

Oh no — it’s here!

Jeremy Goldkorn of Danwei takes issue with a blistering post by Rebecca MacKinnon that once again slams Cisco for selling technology to China’s secret police, knowing it would be used to censor and police the Internet. Jeremy’s points raise some real ethical dilemmas that make this a maddeningly difficult issue to resolve. [He includes Rebecca’s entire Typepad post, which can’t be accessed in China, ironically.]

This writer is very happy to have the Internet at all — I remember the days when it was a struggle to get hold of a copy of Time magazine in Beijing. Whereas in China today today, you have access to almost as much information online as anyone in America, although it is slightly more difficult to find out about certain topics that the Communist Party would rather no one talked about.

If Cisco is blamed for filtering the Chinese Internet, they should also be praised for being a part of building it in the first place.

How to argue this? Maybe I can’t, especially since my skills as ethicist and attorney are sorely limited. But I know part of me is uncomfortable with the argument that we should be happy with what Cisco gave China even if it came with a hidden price tag in terms of censorship and, on more than one occasion, outright repression.

But let’s move the conversation away from the benefits the Internet has brought to China, even with the censorship. What about the implications of the deal for America? It makes a strong statement about US businesses, which seem unaffected by our great president’s clarion call for freedom and liberty and democracy. It’s the cornerstone of our so-called foreign policy, and yet it seems businesses — which reap 99.999 percent of the benefits of Bush’s laissez-faire policies and tax cuts — are allowed to operate in a shadowy parallel universe where such notions as freedom and liberty are considered quaint and anti-productive because they might result in lower sales. China’s secret police are exactly the type of freedom supressors Bush is railing against. Should US companies that do business with them be receiving the largesse of lucrative tax cuts?

This brings up huge ethical questions about business in general, from selling cigarettes, toxic fast food and Thunderbird “wine.” In a world where businesses exist only to make profits for shareholders at any price — at the expense of customer’s health and safety — Cisco is only doing what everybody else does.

So what do we do, nationalize all the companies, run them by the state and regulate every deal they make to be sure they’re in the public interest? I think it’s been done before, with less than stellar success. I have no answers.

Anyway, be sure to read MacKinnon’s excellent if somewhat dreamy post about her rather scary phone call with Cisco, and don’t miss the comments, including Jeremy’s. Then tell me if this isn’t one of the business world’s most mind-numbing dilemmas.

That sure didn’t take long. The ink on Chen Yonglin’s visa hasn’t dried yet, and he’s already testifying in front of congressional committees in DC.

Senior American politicians have heaped praise on the Chinese defector Chen Yonglin, the former consul for political affairs in the Chinese consulate in Sydney, after his address to a US congressional committee in Washington.

Mr Chen repeated claims that more than 1000 Chinese secret agents and informants were tracking and persecuting Falun Gong members. “In each Chinese mission overseas, there must be at least one official in charge of Falun Gong affairs, he said.

He appeared before the global human rights subcommittee of the House committee on international relations, with several experts on China’s repression of religious groups.

Mr Chen – who defected almost two months ago and after a delay was granted a protection visa – spoke mainly about attempts by Chinese diplomats and others in Australia to silence Falun Gong members and supporters. He was congratulated for his testimony, with the chairman of the subcommittee, Chris Smith, saying it was “absolutely explosive”.

Mr Chen, in his written statement, said the Chinese Communist Party’s persecution of the Falun Gong was a systematic and broad-based campaign.
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In Sydney, he said, the consulate undertook regular anti-Falun Gong propaganda campaigns aimed at convincing local government officials and state MPs that the Falun Gong was a dangerous cult.

“The consulate’s work has been very successful, with only a handful of NSW parliamentarians and councillors willing to meet Falun Gong practitioners.” He said the consulate had mobilised Chinese people and companies to “squeeze the Falun Gong’s living space”.

“The consulate paid certain Chinese scholars the fee for trips to China to encourage them to speak against the Falun Gong on TV or write articles for newspapers,” Mr Chen said. “Some visa applicants were asked to swear at the Falun Gong demonstrators in front of the consulate.”

In a separate development, the Australian Federal Police will testify before an Australian Senate committee investigating alleged confidentiality breaches in the asylum case of Mr Chen. There have been claims Australian immigration officials and the Foreign Affairs Minister, Alexander Downer, contravened the Immigration Act by talking to Chinese authorities about the asylum request. Mr Downer told Parliament on June 14 that at no time did he or his department “improperly convey” information about Mr Chen’s intentions. He acknowledged a “brief discussion” about Mr Chen with the Chinese ambassador, Fu Ying. Madame Fu said on June 6 the Australian Government had asked her whether Mr Chen would face persecution if he returned to China. “And I said he won’t,” she said.

And if you believe Madame Fu, I want to know where you get the opium you’re smoking. (Do they actually still call owmen “Madame” anymore?)

It’s thread time.

As predicted, Chen Yonglin continues to be a thorn in China’s side. Now he’s saying part of the jobs of diplomats in the US and Australia is to denounce the FLG and propagandize against them.

China’s diplomats and agents in the United States help Beijing to carry out a crackdown on the Falun Gong spiritual sect, a former Chinese diplomat who is seeking asylum in Australia said on Thursday.

Chen Yonglin told a congressional panel probing China’s human rights record that his job for the past four years at the Chinese consulate in Sydney was to spy on and to persecute followers of Falun Gong, which China banned in 1999 after branding it an “evil cult.”

He presented documents naming six diplomats in the mission he fled in May who worked for a Chinese government agency whose “sole task is to monitor and persecute the Falun Gong.”

“To my knowledge, similar groups have been established in the Chinese missions in the United States and all other countries where the Falun Gong is active,” Chen said in testimony to the House of Representatives Subcommittee on Africa, Global Human Rights and International Operations.

“I know that there are over 1,000 Chinese secret agents and informants in Australia and the number in the United States should not be less,” he said.

The Chinese embassy in Washington could not be reached for comment. On July 11, the Chinese Foreign Ministry said “lies created” by Chen did not merit an official response.

Chen said Beijing viewed the United States and Australia as main Falun Gong bases abroad and Chinese diplomats there were required to denounce the group, distribute anti-sect brochures and pressure businesses, schools and media to shun Falun Gong….

Chen, 37, said he was told in 2003 by a top official from a team set up in the Chinese Foreign Ministry to fight Falun Gong that there were 60,000 followers in China, half in prison camps and half under tight government control.

Other witnesses told the hearing that Chinese officials or persons linked to U.S. missions harassed The Epoch Times newspaper and New Tang Dynasty Television, media outlets run by Falun Gong practitioners in the United States.

Not very surprising, is it?

I can see the steam coming out of Hu’s ears. I can’t stand the Epoch Times, but this kind of approach only makes martyrs of them and furthers their dubious cause.

That’s what the article says; I only out the question mark in because it seems too good to be true.

Chinese farmers have won a dispute over land rights which culminated in a bloody riot last month in the northern province of Hebei, state media says.

The June clashes, in which six people died, were filmed by a local and given widespread publicity abroad.

Farmers in Shengyou village, northern Hebei province, were angry they had not been compensated for land proposed for a power plant’s ash storage yard. Now, the yard will be built in a place where it will take less arable land.

“[Because] Shengyou village, the originally proposed site of the power plant’s ash storage yard, has a big population but relatively little land, the Hebei provincial government… has now made a decision not to requisition land from that village,” Xinhua state news agency reported.

Dramatic footage handed to The Washington Post in June showed local farmers fighting a pitched battle with dozens of unidentified men wearing camouflage gear and construction helmets wielding hunting rifles and clubs.

So maybe protest pays off. If it hadn’t all been captured on videotape and made known to the whole world, would the government show such largesse? I really don’t know. There are thousands of riots poppung up throughout China whack-a-mole style, and if this were to become a common solution, the government is going to build up a hefty tab. (And they should, if they’re going to force people off their land.)

…no matter what our nutty generals might say. That’s China’s new talking point now that General Zhu created an uproar with his talk of a nuclear first strike over Taiwan.

China will not use nuclear weapons first in a military conflict, the foreign minister said Thursday as he tried to quell an uproar over a general’s remark that Beijing might use atomic bombs against U.S. forces in a conflict over Taiwan.
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Foreign Minister Li Zhaoxing said China “will not first use nuclear weapons at any time and under any condition,” according to the official Xinhua News Agency. Li said China has embraced that stance since it developed nuclear weapons in 1964, and it “will not be changed in the future.”

Li made the comments to a group of academics from the United States, Japan and China, Xinhua said.

Beijing has been trying to reassure the United States and its Asian neighbors since Maj. Gen. Zhu Chenghu, a dean at China’s National Defense University, told foreign reporters last week that Beijing might use nuclear weapons if U.S. forces attacked China in a conflict over Taiwan.

Such poor timing. Right when the neocons (and plenty of Dems) are trying to milk “the China threat” for every drop of emotional theater they can, Zhu plays right into their hands and give us a reason to consider the Chinese military a clear and present danger. Hu is gnashing his teeth right now, I’m sure.